x Abu Dhabi, UAESaturday 22 July 2017

Apple chief Tim Cook’s pay goes up to $4.2m but stock gains fall

Mr Cook is contending with thinning profit margins and slowing sales growth as rival gadget makers, such as Samsung Electronics. and Amazon.com, take on Apple with lower-priced devices.

Tim Cook this year forfeited more than 7,000 restricted stock units because of the company’s stock performance to August from a year earlier. AP Photo/Marcio Jose Sanchez
Tim Cook this year forfeited more than 7,000 restricted stock units because of the company’s stock performance to August from a year earlier. AP Photo/Marcio Jose Sanchez

Apple’s chief executive Tim Cook received compensation valued at US$4.2 million this year, a 1.9 per cent rise over 2012, even as the iPhone maker’s stock gains lagged the Standard & Poor’s 500 Index.

The package includes a salary of $1.4m and $2.8m in non-equity incentive plan compensation for the fiscal year that ended in September, the Cupertino, California-based company said in a filing.

Mr Cook is contending with thinning profit margins and slowing sales growth as rival gadget makers, such as Samsung Electronics. and Amazon.com, take on Apple with lower-priced devices.

After outperforming the S&P 500 for four straight years, Apple shares have gained 5.3 per cent this year, compared with the index’s 29 per cent advance.

Apple tapped Mr Cook, a 15-year company veteran, to run the business prior to the death of his predecessor, Steve Jobs, in 2011. Mr Cook received compensation that year of $378m, one of the biggest pay packages on record, boosted by $376.2m in stock awards that he will get over a decade.

Mr Cook this year forfeited more than 7,000 restricted stock units because of the company’s stock performance to August from a year earlier, according to the filing. The modification was part of his 2011 agreement.

His top deputies – Peter Oppenheimer, Eddy Cue and Jeff Williams – all received much smaller pay packages in 2013 than in 2012, because last year they were granted restricted stock units, which are given to officers other than the chief executive every two years.

Mr Oppenheimer, Apple’s chief financial officer, was awarded 2013 compensation valued at $2.6m, including a salary of $866,061 and incentive compensation of $1.7m. A year ago, he received $68.6m, with stock awards valued at $66.2m.

Mr Cue, the senior vice president in charge of iTunes, made $2.6m in 2013, down from $50.4m a year earlier, and Mr Williams, the senior vice president who manages Apple’s supply chain, received $2.6m, down from $68.7m.

In October, Apple forecast gross margins for the current quarter that missed analysts’ projections and predicted that the percentage sales increase in the period would be in the single digits. That would be the smallest increase for the holiday quarter since 2008.

Apple said in the filing that the company exceeded the maximum performance goals for sales and operating income set by the compensation committee, resulting in each officer receiving 200 per cent of base salary under the bonus plan.

business@thenational.ae